FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ABDUL KADIR MOHAMED,

individually and on behalf of all

others similarly situated,

Plaintiff-Appellee,

v.

UBER TECHNOLOGIES, INC.;

RASIER, LLC,

Defendants-Appellants,

and

HIREASE, LLC,

Defendant.

No. 15-16178

D.C. No.

3:14-cv-05200-EMC

RONALD GILLETTE,

Plaintiff-Appellee,

v.

UBER TECHNOLOGIES, INC.,

Defendant-Appellant.

No. 15-16181

D.C. No.

3:14-cv-05241-EMC
2 MOHAMED V. UBER TECHNOLOGIES

ABDUL KADIR MOHAMED,

individually and on behalf of all

others similarly situated,

Plaintiff-Appellee,

v.

UBER TECHNOLOGIES, INC.;

RASIER, LLC,

Defendants,

and

HIREASE, LLC,

Defendant-Appellant.

No. 15-16250

D.C. No.

3:14-cv-05200-EMC

ORDER AND

AMENDED

OPINION

Appeal from the United States District Court

for the Northern District of California

Edward M. Chen, District Judge, Presiding

Argued and Submitted June 16, 2016

San Francisco, California

Filed September 7, 2016

Amended December 21, 2016

Before: Richard C. Tallman, Richard R. Clifton, and

Sandra S. Ikuta, Circuit Judges.

Order;

Opinion by Judge Clifton
MOHAMED V. UBER TECHNOLOGIES 3

SUMMARY*

Arbitration / California Private Attorney General Act

The panel affirmed in part and reversed in part the district

court’s orders denying Uber Technologies, Inc.’s motion to

compel arbitration in actions brought by two former Uber

drivers, Abdul Mohamed and Ronald Gillette, on behalf of

themselves and a proposed class of drivers, and remanded for

further proceedings.

The district court denied Uber’s motion to compel

arbitration of the plaintiffs’ claims.

The panel held that the district court erred in assuming the

authority to decide whether the parties’ arbitration

agreements were enforceable. The panel further held that the

question of arbitrability as to all but Gillette’s California

Private AttorneyGeneral Act (“PAGA”) claim was delegated

to the arbitrator. The panel also held that under the terms of

the agreement Gillette signed, the PAGA waiver should be

severed from the arbitration agreement and Gillette’s PAGA

claim may proceed in court on a representative basis. The

panel also held that all of plaintiffs’ remaining arguments,

including both Mohamad’s challenge to the PAGA waiver in

the agreement he signed and the challenge by both plaintiffs

to the validity of the arbitration agreement itself, were subject

to resolution via arbitration.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
4 MOHAMED V. UBER TECHNOLOGIES

The panel affirmed the district court’s order denying the

motion to compel arbitration filed by Hirease, LLC, an

independent background-check company that Mohamed

named in his complaint alongside Uber. The panel held that

Hirease was not entitled to compel arbitration as Uber’s

agent.

COUNSEL

Theodore Boutrous, Jr. (argued), Theane D. Evangelis, and

Brandon J. Stoker, Gibson, Dunn & Crutcher LLP, Los

Angeles, California; Joshua S. Lipshutz and Kevin J. RingDowell, Gibson, Dunn & Crutcher LLP, San Francisco,

California; Rod M. Fliegel, Littler Mendelson P.C., San

Francisco, California; Andrew M. Spurchise, Littler

Mendelson P.C., New York, New York; for DefendantsAppellants Uber Technologies, Inc. and Rasier, LLC.

Pamela Devata (argued) and Nicholas R. Clements, Seyfarth

Shaw LLP, San Francisco, California; Timothy L. Hix,

Seyfarth Shaw LLP, Los Angeles, California; for DefendantAppellant Hirease, LLC.

Laura Ho (argued), Andrew P. Lee, and William JhaveriWeeks, Goldstein Borgen Dardarian & Ho, Oakland,

California; Robert Ahdoot, Tina Wolfson, and Theodore

Maya, Ahdoot & Wolfson, PC, West Hollywood, California;

MeredithDesautels, Dana Isaac Quinn, and Elisa Della-Piana,

Lawyers’ Committee for Civil Rights of the San Francisco

Bay Area, San Francisco, California; Monique Olivier,

Duckworth Peters Lebowitz Olivier LLP, San Francisco,

California; for Plaintiffs-Appellees.
MOHAMED V. UBER TECHNOLOGIES 5

Kevin Ranlett, Archis A. Parasharami, Evan M. Tager, and

Andrew J. Pincus, Mayer Brown LLP, Washington, D.C.;

Warren Postman and Kate Comerford Todd, U.S. Chamber

Litigation Center, Inc., Washington, D.C.; for Amicus Curiae

Chamber of Commerce of the United States.

Matthew C. Koski, National Employment Lawyers

Association, Oakland, California; David H. Seligman,

Towards Justice, Denver, Colorado; Jahan C. Sagafi, Outten

& Golden LLP, San Francisco, California; for Amici Curiae

National Employment Law Project, National Employment

Lawyers Association, National Association of Consumer

Advocates, and Towards Justice.

ORDER

The opinion filed on September 7, 2016, is hereby

amended as follows:

1. On page 18 of the slip opinion, in footnote 6, the last

sentence (and related citations) should be deleted.

We note that Plaintiffs also raised the

argument that the class and collective action

waivers in the arbitration agreements may

violate the National Labor Relations Act

(NLRA) for the first time in a sur-reply. That

untimely submission waived the argument.

See, e.g., United States v. Dreyer, 804 F.3d

1266, 1277 (9th Cir. 2015) (“Generally, an

appellee waives any argument it fails to raise

in its answering brief.”).
6 MOHAMED V. UBER TECHNOLOGIES

With this amendment, the panel has voted to deny the

petition for rehearing en banc. The Petition for Rehearing En

Banc has been circulated to the full court, and no judge has

requested a vote on whether to rehear the matter en banc. Fed.

R. App. P. 35.

The petition rehearing en banc is DENIED. No further

petition for rehearing may be filed.

OPINION

CLIFTON, Circuit Judge:

Plaintiff-Appellees Abdul Mohamed and Ronald Gillette,

former Uber drivers, filed an action in district court alleging

on behalf of themselves and a proposed class of other drivers

that Defendants Uber Technologies, Inc., Rasier, LLC, and

Hirease, LLC, violated the Fair Credit Reporting Act (FCRA)

and various state statutes. Gillette has also brought a

representative claim against Uber under California’s Private

Attorneys General Act of 2004 (PAGA) alleging that he was

misclassified as an independent contractor rather than an

employee. The district court denied Uber’s motion to compel

arbitration of the claims. Mohamed v. Uber Technologies,

109 F. Supp. 3d 1185 (N.D. Cal. 2015). Uber argues on

appeal (1) that the district court erroneously considered

whether the arbitration provisions were enforceable when that

question was clearly delegated to an arbitrator, and (2) that

even if the district court properly considered arbitrability, it

erred in concluding that the arbitration provisions were

invalid and in declining to compel arbitration.
MOHAMED V. UBER TECHNOLOGIES 7

We conclude that the district court erred at the first step

and improperly assumed the authority to decide whether the

arbitration agreements were enforceable. The question of

arbitrability as to all but Gillette’s PAGA claims was

delegated to the arbitrator. Under the terms of the agreement

Gillette signed, the PAGA waiver should be severed from the

arbitration agreement and Gillette’s PAGA claims may

proceed in court on a representative basis. All of Plaintiffs’

remaining arguments, including both Mohamed’s challenge

to the PAGA waiver in the agreement he signed and the

challenge by both Plaintiffs to the validity of the arbitration

agreement itself, are subject to resolution via arbitration.

I. Background

Plaintiff Abdul Mohamed began driving for Uber’s black

car service in Boston in 2012, and for UberX1around October

2014. Like all Uber drivers, Mohamed used a smartphone to

access the Uber application while driving, which enabled him

to pick up customers.

In late July 2013, Mohamed was required to agree to two

new contracts with Uber (the “Software License and Online

Services Agreement” and the “Driver Addendum”; jointly,

the “2013 Agreement”) before he was allowed to sign in to

the application. The 2013 Agreement provided that it was

governed by California law. It included an arbitration

provision requiring Uber drivers to submit to arbitration to

resolve most disputes with the company. It also included a

1 An Uber black car is a commercially registered livery car that

passengers can access using the Uber smartphone application. UberX is

a lower-cost alternative in which drivers use their own cars to pick up

passengers via the app.
8 MOHAMED V. UBER TECHNOLOGIES

provision requiring drivers to waive their right to bring

disputes as a class action, a collective action, or a private

attorney general representative action. Drivers could opt out

of arbitration by delivering notice of their intent to opt out to

Uber within 30 days either in person or by overnight delivery

service. Mohamed accepted the agreements and did not opt

out.

Nearly a year later, in June 2014, Uber released an

updated version of the Software License and Online Services

Agreement and the Driver Addendum (jointly, the “2014

Agreement”). The 2014 Agreement also provided that it was

governed by California law. It included an updated

arbitration provision with an easier opt-out procedure that

enabled drivers to opt out via e-mail as well as in person or

by delivery service. It also included a provision requiring all

disputes with the company “to be resolved only by an

arbitrator through final and binding arbitration on an

individual basis only, and not by way of court or jury trial, or

by way of class, collective, or representative action.” 

Mohamed accepted these agreements and did not opt out. In

early October 2014, Mohamed accepted a similar agreement

with Rasier, a wholly owned subsidiary of Uber (“Rasier

Software Sublicense & Online Services Agreement” (Rasier

Agreement)).2

In late October 2014, shortly after he began driving for

UberX, Mohamed’s access to the app was cut off due to

2 Except where necessary, this opinion refers to Uber and Rasier

collectively as “Uber.” The Rasier Agreement contained terms similar to

those in the Software License and Online Services Agreement, and neither

party has alleged any arguments specific to the Rasier Agreement. Thus,

we treat it as part of the 2014 Agreement.
MOHAMED V. UBER TECHNOLOGIES 9

negative information on his consumer credit report,

effectively terminating his ability to drive for Uber.

Plaintiff-AppellantRonald Gillette began driving for Uber

in the San Francisco Bay Area in March 2013. Like

Mohamed, he was required to agree to the 2013 Agreement

before signing into the Uber application in late July 2013. 

Also like Mohamed, he did not opt out. In April 2014,

Gillette’s access to the app was cut off because of negative

information on his consumer credit report. This effectively

terminated his relationship with Uber.

On November 24, 2014, Mohamed filed a class action in

the Northern District of California against Uber, Rasier, and

Hirease, an independent company that conducted background

checks. Mohamed alleged that the use of his consumer credit

report violated the FCRA, the Massachusetts Consumer

Credit Reporting Act (MCCRA), and the California

Consumer Credit Reporting Agencies Act (CCRAA). Two

days later, on November 26, 2014, Gillette filed a separate

lawsuit against Uber, also in the Northern District of

California. Gillette alleged that the company’s use of his

consumer credit report violated the FCRA and the California

Investigative Consumer Reporting Agencies Act (ICRAA). 

He also alleged that Uber had misclassified him and other

employees as independent contractors in violation of

California’s PAGA statute.

Uber moved to compel arbitration in both lawsuits,

arguing that Gillette was bound by the arbitration provision

in the 2013 Agreement and Mohamed by the arbitration

provision in the 2014 Agreement. The district court denied

both motions, Mohamed, 109 F. Supp. 3d at 1190, and Uber

now appeals.
10 MOHAMED V. UBER TECHNOLOGIES

II. Discussion

We review de novo an order denying a motion to compel

arbitration. Oracle Am., Inc. v. Myriad Grp. A.G., 724 F.3d

1069, 1072 (9th Cir. 2013).

Both the 2013 and the 2014 Agreements contained

provisions that provided, using very similar language, that

disputes would be resolved by arbitration and, further, that

any dispute as to arbitrability (with one exception discussed

below) would be resolved by the arbitrator. These provisions

stated:

Except as it otherwise provides, this

Arbitration Provision is intended to apply to

the resolution of disputes that otherwise

would be resolved in a court of law or before

a forum other than arbitration. This

Arbitration Provision requires all such

disputes to be resolved only by an arbitrator

through final and binding arbitration and not

by way of court or jury trial.3

Such disputes include without limitation

disputes arising out of or relating to

interpretation or application ofthisArbitration

Provision, including the enforceability,

revocability or validity of the Arbitration

3

In the 2014 Agreement, this sentence read: “This Arbitration Provision

requires all such disputes to be resolved only by an arbitrator through final

and binding arbitration on an individual basis only and not by way of court

or jury trial, or by way of class, collective, or representative action.
MOHAMED V. UBER TECHNOLOGIES 11

Provision or any portion of the Arbitration

Provision.

The 2014 Agreement continued: “All such matters shall be

decided by an Arbitrator and not by a court or judge.”

Both the 2013 and 2014 Agreements also contained

provisions that required drivers to waive the right to bring

class, collective, and representative actions (including claims

under the PAGA statute), either in court or in arbitration. The

2013 Agreement, but not the 2014 Agreement, carved out

challenges to these waivers from the general delegation

provision: “Notwithstanding any other clause contained in

this Agreement, any claim that all or part of the Class Action

Waiver, Collective Action Waiver or Private Attorney

General Waiver is invalid, unenforceable, unconscionable,

void or voidable may be determined only by a court of

competent jurisdiction and not by an arbitrator.”

The district court concluded that the delegation clauses in

both the 2013 and the 2014 Agreements were ineffective

because they were not clear and unmistakable. Mohamed,

109 F. Supp. 3d at 1198–1204. The court also concluded that

even if the delegation clauses were clear and unmistakable,

they were unenforceable because they were unconscionable. 

Id. at 1204–16. We disagree. The 2013 Agreement clearly

and unmistakably delegated the question of arbitrabilityto the

arbitrator except as pertained to the arbitrability of class

action, collective action, and representative claims. The 2014

Agreement clearly and unmistakably delegated the question

of arbitrability to the arbitrator under all circumstances. 

Neither delegation provision was unconscionable. Thus, all

of Plaintiffs’ challenges to the enforceabilityof the arbitration

agreement, save Gillette’s challenge to the enforceability of
12 MOHAMED V. UBER TECHNOLOGIES

the PAGA waiver in the 2013 Agreement, should have been

adjudicated in the first instance by an arbitrator and not in

court.

A. Delegation of the issue of arbitrability

“[U]nlike the arbitrability of claims in general, whether

the court or the arbitrator decides arbitrability is ‘an issue for

judicial determination unless the parties clearly and

unmistakably provide otherwise.’” Oracle Am., 724 F.3d at

1072 (quoting Howsam v. Dean Witter Reynolds, Inc.,

537 U.S. 79, 83 (2002)). “In other words, there is a

presumption that courts will decide which issues are

arbitrable; the federal policy in favor of arbitration does not

extend to deciding questions of arbitrability.” Id. Clear and

unmistakable evidence of an agreement to arbitrate

arbitrability “might include . . . a course of conduct

demonstrating assent . . . or . . . an express agreement to do

so.” Momot v. Mastro, 652 F.3d 982, 988 (9th Cir. 2011)

(quoting Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 79–80

(2010) (Stevens, J., dissenting)).

In Momot, we held that language “delegating to the

arbitrators the authority to determine the validity or

application of any of the provisions of the arbitration clause[]

constitutes an agreement to arbitrate threshold issues

concerning the arbitration agreement.” Id. (quoting Rent-ACtr., 561 U.S. at 68) (internal quotation marks omitted). 

Here, both the 2013 and the 2014 Agreements delegated to

the arbitrators the authority to decide issues relating to the

“enforceability, revocability or validity of the Arbitration

Provision or any portion of the Arbitration Provision.” This

language is similar to but more expansive than the language

at issue in Momot, and thus also “clearly and unmistakably
MOHAMED V. UBER TECHNOLOGIES 13

indicates [the parties’] intent for the arbitrators to decide the

threshold question of arbitrability.” Id.4

The district court determined that the delegation

provisions themselves were “unambiguous,” but it

nonetheless held that they conflicted with venue provisions

elsewhere in the 2013 and 2014 Agreements. Mohamed,

109 F. Supp. 3d at 1199. Both venue provisions stated that

“any disputes, actions, claims, or causes of action arising out

of or in connection with this Agreement or the Uber Service

or Software shall be subject to the exclusive jurisdiction of

the state and federal courts located in the City and County of

San Francisco.” The district court concluded that the

language in the venue provisions granting state or federal

courts in San Francisco “exclusive jurisdiction” over “any

disputes, actions, claims or causes of action arising out of or

in connection with this Agreement” was “inconsistent and in

considerable tension with the language of the delegation

clauses, which provide[d] that ‘without limitation’

arbitrability will be decided by an arbitrator.” Id. at 1201. 

The court also identified an inconsistency between the

“without limitation” language and the carve-out provision in

the 2013 Agreement granting courts jurisdiction over

challenges to the PAGA waiver. Id. at 1201–02.

These conflicts are artificial. The clause describing the

scope of the arbitration provision was prefaced with “[e]xcept

as it otherwise provides,” which eliminated the inconsistency

4 The arbitration agreements may not have clearly and unmistakably

delegated to the arbitrator the authority to decide the question of waiver

by litigation conduct. See Martin v. Yasuda, No. 15-55696, 2016 WL

3924381, at *5 (9th Cir. July 21, 2016). But that question is not at issue

in this litigation.
14 MOHAMED V. UBER TECHNOLOGIES

between the general delegation provision and the specific

carve-out in the 2013 Agreement. As for the venue provision,

the California Court of Appeal has observed that “[n]o matter

how broad the arbitration clause, it may be necessary to file

an action in court to enforce an arbitration agreement, or to

obtain a judgment enforcing an arbitration award, and the

parties may need to invoke the jurisdiction of a court to

obtain other remedies.” Dream Theater, Inc. v. Dream

Theater, 21 Cal. Rptr. 3d 322, 328 (Cal. Ct. App. 2004), as

modified on denial of reh’g (Dec. 28, 2004). It is apparent

that the venue provision here was intended for these purposes,

and to identify the venue for any other claims that were not

covered by the arbitration agreement. That does not conflict

with or undermine the agreement’s unambiguous statement

identifying arbitrable claims and arguments.

The delegation provisions clearly and unmistakably

delegated the question of arbitrability to the arbitrator for all

claims except challenges to the class, collective, and

representative action waivers in the 2013 Agreement. In

accordance with Supreme Court precedent, we are required to

enforce these agreements “according to their terms” and, in

the absence of some other generally applicable contract

defense, such as fraud, duress, or unconscionability, let an

arbitrator determine arbitrability as to all but the claims

specifically exempted by the 2013 Agreement. Rent-A-Ctr.,

561 U.S. at 67.

B. The delegation provisions were not unconscionable

The district court also held that, even if the delegation

provisions were clear and unmistakable, they were both

unenforceable due to unconscionability. Mohamed, 109 F.

Supp. 3d at 1204–16. Under California law,
MOHAMED V. UBER TECHNOLOGIES 15

“‘unconscionability has both a ‘procedural’ and a

‘substantive’ element,’ the former focusing on ‘oppression’

or ‘surprise’ due to unequal bargaining power, the latter on

‘overly harsh’ or ‘one-sided’ results.” Armendariz v. Found.

Health Psychcare Servs., Inc., 6 P.3d 669, 690 (Cal. 2000)

(quoting A & M Produce Co. v. FMC Corp., 186 Cal. Rptr.

114, 121–22 (Cal. Ct. App. 1982)). Both substantive and

procedural unconscionability must be present in order for a

court to find a contract unconscionable, but “they need not be

present in the same degree.” Id. Recently, the California

Supreme Court has emphasized that “unconscionability

requires a substantial degree of unfairness beyond ‘a simple

old-fashioned bad bargain.’” Baltazar v. Forever 21, Inc.,

367 P.3d 6, 12 (Cal. 2016) (quoting Sonic-Calabasas A, Inc.

v. Moreno, 311 P.3d 184, 291 (Cal. 2013)). Rather,

unconscionable contracts are those that are “so one-sided as

to ‘shock the conscience.’” Id. at 11 (quoting Pinnacle

Museum Tower Assn. v. Pinnacle Mkt. Dev. (US), LLC,

282 P.3d 1217, 1232 (Cal. 2012)). When considering an

unconscionability challenge to a delegation provision, the

court must consider only arguments “specific to the

delegation provision.” Rent-A-Ctr., 561 U.S. at 73

The district court concluded thatthe delegation provisions

in both the 2013 and 2014 Agreements were procedurally and

substantively unconscionable. For the 2013 Agreement, the

court concluded that the provision was procedurally

unconscionable because it was “hidden in a prolix printed

form,” Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1280

(9th Cir. 2006) (en banc) (quoting Flores v. Transamerica

HomeFirst, Inc., 113 Cal. Rptr. 2d 376, 381 (Cal. Ct. App.

2001)), and because there was no meaningful opportunity for

the drivers to reject the contract. Mohamed, 109 F. Supp. 3d

at 1205–06. For the 2014 Agreement, the court concluded
16 MOHAMED V. UBER TECHNOLOGIES

that the delegation provision was procedurally

unconscionable because “the 2014 agreement[] utterly failed

to notify drivers of a specific drawback of the delegation

clause—namely, that drivers may be required to pay

considerable forum fees to arbitrate arbitrability,” and

because employees likely felt at least some pressure not to

opt out of arbitration despite the presence of a clear opt-out

provision. Id. at 1215–16. The court also concluded that

both the 2013 and 2014 Agreements were substantively

unconscionable because they required arbitration costs and

fees to be shared equally between Uber and the driver. Id. at

1206–10, 1216. As a result, it concluded that both delegation

provisions should be invalidated. Id. at 1210, 1216.

Uber argues that the delegation provisions could not have

been procedurally unconscionable because both agreements

gave drivers an opportunity to opt out of arbitration

altogether. The district court agreed with Uber that, under

Ninth Circuit precedent, “the existence of a meaningful right

to opt-out of [arbitration] necessarily renders [the arbitration

clause] (and the delegation clause specifically) procedurally

conscionable as a matter of law.” Id. at 1212. As to the 2013

Agreement, the court concluded that the right to opt out was

not “meaningful” because drivers were required to opt out

either in person at Uber’s San Francisco offices or by

overnight delivery service, both of which were so

burdensome as to make the opt-out right “illusory.” Id. at

1206. As to the 2014 Agreement, which contained a much

less burdensome opt-out procedure, the court held that our

precedent “failed to applyCalifornia law as announced by the
MOHAMED V. UBER TECHNOLOGIES 17

California Supreme Court,” and as such, declined to apply it.5

Id. at 1212.

The district court does not have the authority to ignore

circuit court precedent, and neither do we. “Binding

authority must be followed unless and until overruled by a

body competent to do so.” Hart v. Massanari, 266 F.3d

1155, 1170 (9th Cir. 2001); see Miller v. Gammie, 335 F.3d

889, 899–900 (9th Cir. 2003) (en banc) (identifying the

limited circumstances when a three-judge panel of this court

is not bound by our precedent). In Nagrampa, we determined

that “[t]he threshold inquiryin California’s unconscionability

analysis is ‘whether the arbitration agreement is adhesive.’” 

469 F.3d at 1281 (quoting Armendariz, 6 P.3d at 690). In

Circuit City Stores, Inc. v. Ahmed, we held that an arbitration

agreement is not adhesive if there is an opportunity to opt out

of it. 283 F.3d 1198, 1199 (9th Cir. 2002); see also Kilgore

v. KeyBank, Nat. Ass’n, 718 F.3d 1052, 1059 (9th Cir. 2013)

(en banc). Taken together, these two principles compel us to

find that the 2014 Agreement, at least, is not adhesive, which

supports our holding that the delegation provision is not

unconscionable.

The district court’s conclusion that the right to opt out of

the 2013 Agreement was illusory fares no better. “An

5 The district court order cited several of our decisions, culminating with

Kilgore v. Key Bank, Nat’l Ass’n, 718 F.3d 1052 (9thCir. 2013) (en banc),

acknowledging that they supported Uber’s position. Mohamed, 109 F.

Supp. 3d at 1212. Nonetheless, the order stated that the district court

“cannot follow the Ninth Circuit cases cited by Uber in the face of directly

contradicting California Supreme Court authority.” Id. The California

authority cited in the order preceded our decision inKilgore, so the court’s

decision to ignore our precedent cannot be explained by any intervening

California authority.
18 MOHAMED V. UBER TECHNOLOGIES

illusory promise is one containing words ‘in promissory form

that promise nothing’ and which ‘do not purport to put any

limitation on the freedom of the alleged promisor.’” Flores

v. Am. Seafoods Co., 335 F.3d 904, 912 (9th Cir. 2003)

(quoting 2 Corbin on Contracts 142 (rev. ed. 1995)). While

we do not doubt that it was more burdensome to opt out of

the arbitration provision by overnight delivery service than it

would have been by e-mail, the contract bound Uber to accept

opt-outs from those drivers who followed the procedure it set

forth. There were some drivers who did opt out and whose

opt-outs Uber recognized. Thus, the promise was not

illusory. The fact that the opt-out provision was “buried in

the agreement” does not change this analysis. Mohamed,

109 F.Supp. 3d at 1205. As we noted in Ahmed, “one who

signs a contract is bound by its provisions and cannot

complain of unfamiliarity with the language of the

instrument.” 283 F.3d at 1200 (quoting Madden v. Kaiser

Found. Hosps., 552 P.2d 1178, 1185 (Cal. 1976)).

The delegation provisions were not procedurally

unconscionable in either the 2013 or the 2014 Agreements. 

Because the agreements were not procedurally

unconscionable, and because both procedural and substantive

unconscionability must be present in order for an agreement

to be unenforceable, see Armendariz, 6 P.3d at 690, we need

not reach the question whether the agreements here were

substantively unconscionable. The district court should have

ordered the parties to arbitrate their dispute over arbitrability

(with a narrow exception for the argument over the PAGA
MOHAMED V. UBER TECHNOLOGIES 19

waiver in the 2013 Agreement, as discussed below), and we

remand with instructions that it do so.6

C. The effective vindication doctrine

Plaintiffs also argue that even if the delegation provisions

are otherwise enforceable, they are invalid because both the

2013 and 2014 Agreements contain a fee term requiring

drivers to split the costs of arbitration equally with Uber and

thus preclude drivers from effectively vindicating their

federal statutory rights. Effective vindication provides courts

with a means to “invalidate, on ‘public policy’ grounds,

arbitration agreements that ‘operat[e] . . . as a prospective

waiver of a party’s right to pursue statutory remedies.’” Am.

Exp. Co. v. Italian Colors Rest., 133 S. Ct. 2304, 2310 (2013)

(quoting Mitsubishi Motors Corp. v. Soler ChryslerPlymouth, Inc., 473 U.S. 614, 637 n. 19 (1985)). In Italian

Colors, the Supreme Court stated that effective vindication

may “cover filing and administrative fees attached to

arbitration that are so high as to make access to the forum

impracticable.” Id. at 2310–11; see also Chavarria v. Ralphs

Grocery Co., 733 F.3d 916, 927 (9th Cir. 2013) (finding that

the effective vindication doctrine was implicated when

“administrative and filing costs, even disregarding the cost to

prove the merits, effectively foreclose pursuit of the claim”). 

Evidence submitted by the Plaintiffs suggests that the costs of

arbitration in this case may exceed $7,000 per day.

6 We note that Plaintiffs also raised the argument that the class and

collective action waivers in the arbitration agreements may violate the

National Labor Relations Act (NLRA) for the first time in a sur-reply. 

That untimely submission waived the argument. See, e.g., United States

v. Dreyer, 804 F.3d 1266, 1277 (9th Cir. 2015) (“Generally, an appellee

waives any argument it fails to raise in its answering brief.”).
20 MOHAMED V. UBER TECHNOLOGIES

However, Uber has committed to paying the full costs of

arbitration. So long as Uber abides by this commitment, the

fee term in the arbitration agreement presents Plaintiffs with

no obstacle to pursuing vindication of their federal statutory

rights in arbitration. As a result, we decline to reach the

question of whether the fee term would run afoul of the

effective vindication doctrine if it were enforced as written.

D. The PAGA waiver

Plaintiffs argue that the arbitration provisions in the 2013

and 2014 Agreements were invalid under California law

because they both contained unenforceable, unseverable

waivers of Plaintiffs’ claims under the California PAGA

statute. Because we conclude that the district court should

not have reached the question of whether the arbitration

agreements were enforceable in the first place, it is not

necessary to address this argument pertaining to the 2014

Agreement. Plaintiffs’ challenges to the enforceability and

severability of the PAGA waiver in the 2014 Agreement fall

to the arbitrator to decide.

As noted above, however, the 2013 Agreement

specifically required the district court, and not the arbitrator,

to consider certain challenges to the arbitration provision,

including challenges to the enforceability of the PAGA

waiver. Because of that carve-out, it remains for us to

consider on the merits whether the PAGA waiver in that

agreement is enforceable, and what effect the waiver has on

the arbitration provision as a whole.

The district court concluded that the arbitration provision

in the 2013 Agreement was procedurally unconscionable

because it was adhesive, oppressive, and a surprise to drivers
MOHAMED V. UBER TECHNOLOGIES 21

who accepted the agreement, and that it was substantively

unconscionable because it contained a PAGA waiver that was

unenforceable under California law. Mohamed, 109 F. Supp.

3d at 1217–18. The district court also concluded that the

PAGA waiver was unseverable from the remainder of the

agreement and that “the entirety of the arbitration agreement

fails because the PAGA waiver fails.” Id. at 1218. For the

reasons stated above, the district court’s holding on

unconscionability was erroneous.

Perhaps recognizing that the district court’s

unconscionability analysis ran counter to existing Ninth

Circuit precedent, Plaintiffs argue on appeal that even if the

district court erred in finding that the arbitration provision in

the 2013 Agreement was unconscionable, the PAGA waiver

was still invalid under California law and unseverable from

the remainder of the arbitration provision under the terms of

the contract. Plaintiffs argue that the invalid PAGA waiver

thus dooms the entire arbitration provision, such that claims

governed by that agreement (i.e., all of Gillette’s claims)

must be litigated in court. Although we agree that the PAGA

waiver in the 2013 Agreement was invalid under California

law, we conclude that it is severable from the remainder of

the 2013 agreement.

In Iskanian v. CLS Transp. L.A., LLC, 327 P.3d 129 (Cal.

2014), the California Supreme Court held that where “an

employment agreement compels the waiver of representative

claims under the PAGA, it is contrary to public policy and

unenforceable as a matter of state law.” Id. at 149. We have

held that the Federal Arbitration Act does not preempt this

rule. Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425,

427 (9th Cir. 2015). Uber attempts to distinguish this case

from Iskanian because drivers were able to opt out of the
22 MOHAMED V. UBER TECHNOLOGIES

2013 Agreement, but its effort is unavailing. Drivers

presented with the 2013 Agreement were required to make

the decision whether or not to opt out within 30 days of

receipt, and Iskanian made clear that, while employees “are

free to choose whether or not to bring PAGA actions when

they are aware of Labor Code violations,” it is “contrary to

public policy for an employment agreement to eliminate this

choice altogether by requiring employees to waive the right

to bring a PAGA action before any dispute arises.” 327 P.3d

at 313. Because the PAGA waiver in the 2013 Agreement

required employees to make a decision as to whether or not

they would preserve their right to bring PAGA claims before

they knew any such claims existed, it is unenforceable under

Iskanian and Sakkab.

The PAGA waiver is severable from the remainder of the

arbitration provision in the 2013 Agreement, however. In

Section 14.1, the agreement provided that “[i]f any provision

of the Agreement is held to be invalid or unenforceable, such

provision shall be struck and the remaining provisions shall

be enforced to the fullest extent under law.” In Section

14.3(v), the agreement further provided:

There will be no right or authority for any

dispute to be brought, heard, or arbitrated as a

private attorney general representative action

(“Private Attorney General Waiver”). The

Private Attorney General Waiver shall not be

severable from this Arbitration Provision in

any case in which a civil court of competent

jurisdiction finds the Private AttorneyGeneral

Waiver is unenforceable. In such instances

and where the claim is brought as a private

attorney general, such private attorney general
MOHAMED V. UBER TECHNOLOGIES 23

claim must be litigated in a civil court of

competent jurisdiction.

While this provision is hardly a model of clarity, the third

sentence stated explicitly that PAGA claims are subject to

litigation in court, contrary to the district court’s conclusion

that the PAGA waiver was unseverable from the remainder of

the agreement. Finally, in Section 14.3(ix), the agreement

provided that “[e]xcept as stated in subsection v, above, in the

event any portion of this Arbitration Provision is deemed

unenforceable, the remainder of this Arbitration Provision

will be enforceable.” Reading these ambiguous provisions

together, we conclude that in stating that the PAGA waiver

and the arbitration provision are not severable, the contract

provides that, if the PAGA waiver turned out to be invalid,

the arbitration provision would also be invalid as to any

PAGA representative claim. Thus, while Plaintiffs’ PAGA

claim must be litigated in court, the PAGA waiver does not

invalidate the remainder of the arbitration provision in the

2013 Agreement, and it should be enforced according to its

terms.

E. Hirease cannot compel arbitration

Plaintiff Mohamed (but not Gillette) named independent

background-check company Hirease in his complaint

alongside Uber. Hirease moved to join Uber’s motion to

compel Mohamed into arbitration, though Hirease was not

identified as a party or a signatory to the agreement between

Uber and the drivers. The district court denied Hirease’s

joinder in Uber’s motion to compel on the same grounds that

it denied Uber’s motion, without separately discussing the

question of whether Hirease was covered by the arbitration

provisions. Mohamed, 109 F. Supp. 3d at 1237.
24 MOHAMED V. UBER TECHNOLOGIES

On appeal, Hirease argues that it should be covered by the

arbitration agreement because: (1) Mohamed has alleged an

agency relationship between Hirease and Uber, see, e.g.,

Murphy v. DirecTV, Inc., 724 F.3d 1218, 1232–33 (9th Cir.

2013); (2) Hirease and Uber share an “identity of interest,”

see, e.g., Jones v. Jacobson, 125 Cal. Rptr. 3d 522, 537 n.9

(Cal. Ct. App. 2011); and (3) the cause of action alleged

against Hirease is “intimately founded in and intertwined

with” underlying contract obligations, Murphy, 724 F.3d at

1229 (quotingKramer v. Toyota Motor Corp., 705 F.3d 1122,

1128 (9th Cir. 2013)).

Hirease’s first argument rests on the wording of

Mohamed’s complaint, which alleged generally that

Defendants—defined to include Hirease, Uber, Rasier, and

unknown Does—knowingly violated the FCRA, MCRA, and

CCRAA by failing to provide job applicants and employees

with adequate notice regarding the use of their consumer

credit reports for employment purposes. The complaint also

included allegations that “each named Defendant and DOES

1–50 were the employees, agents, or representatives of each

other” and that “[e]ach Defendant has ratified and approved

the acts of its agents.” Hirease argues that under California

law, “a plaintiff’s allegations of an agency relationship

among defendants is sufficient to allow the alleged agents to

invoke the benefit of an arbitration agreement executed by

their principal even though the agents are not parties to the

agreement.” Thomas v. Westlake, 139 Cal. Rptr. 3d 114, 121

(Cal. Ct. App. 2012).

As the California Court of Appeal has noted elsewhere,

however, “[c]omplaints in actions againstmultiple defendants

commonly include conclusory allegations that all of the

defendants were each other’s agents or employees and were
MOHAMED V. UBER TECHNOLOGIES 25

acting within the scope of their agency or employment.” 

Barsegian v. Kessler & Kessler, 155 Cal. Rptr. 3d 567, 571

(Cal. Ct. App. 2013). If Hirease were correct that such

allegations were sufficient to establish an agency relationship

for the purpose of compelling arbitration, “in every multidefendant case in which the complaint contained such

boilerplate allegations of mutual agency, as long as one

defendant had entered into an arbitration agreement with the

plaintiff, every defendant would be able to compel arbitration,

regardless of how tenuous or nonexistent the connections

among the defendants might actually be.” Id. As such,

generalized allegations of an agency relationship made in a

complaint are not, by themselves, a sufficient ground on

which to compel arbitration when “the mutual agency of all

defendants is not a judicially admitted fact.” Id. at 573. 

There has been no such judicial admission here.

There is no specific indication of an actual agency

relationship between Uber and Hirease, either in the

complaint or elsewhere in the record. An agency relationship

“requires that the principal maintain control over the agent’s

actions.” Murphy, 724 F.3d at 1232. Mohamed did not

allege any facts suggesting that Uber maintained control over

Hirease’s actions, or vice versa. Indeed, while the complaint

stated four causes of action, Hirease was named in only one

of them, for a violation of the MCRA. This claim alleged

(1) that Hirease failed to deliver a copy of the consumer

report to Plaintiff and other members of the MCRA class as

required byMassachusetts General Laws (MGL) ch. 93 § 60,7

 

7 MGL ch. 93 § 60 requires consumer reporting agencies under certain

circumstances to:
26 MOHAMED V. UBER TECHNOLOGIES

and (2) that Defendants failed to advise members of the

putative MCRA class of their rights under MGL ch. 93 § 62.8

Hirease’s alleged violation of MGL ch. 93 § 60 was

predicated on its own failure to act, and there is nothing in the

complaint to suggest that failure was influenced or controlled

by Uber. Nor is there any indication that Hirease had any

role in or control over the alleged failure to advise members

of the putative MCRA class of their rights under MGL ch. 93

§ 62, which applies to “user[s] of . . . consumer credit

reports” such as Uber. Because Hirease “has presented no

evidence, on appeal or before the district court, that [Uber]

controlled its behavior in ways relevant to [Mohamed’s]

allegations,” Hirease is not entitled to compel arbitration as

Uber’s agent. Murphy, 724 F.3d at 1233.

notify the consumer of the fact that public record

information is being reported by the consumer reporting

agency, together with the name and address of the

person to whom such information is being reported; or

maintain strict procedures designed to insure that

whenever public record information which is likely to

have an adverse effect on a consumer’s ability to obtain

employment is reported it is complete and up to date.

It also requires consumer reporting agencies to “enter into an agreement

with the user of such consumer report which provides that no consumer

report may be requested by the user until and unless the user has provided

written notice to the employee or prospective employee that a consumer

report regarding the employee will be requested.” Id.

8 MGL ch. 93 § 62 provides in relevant part that “[w]henever . . . 

employment involving a consumer is denied or terminated . . . because of

information contained in a consumer report from a consumer reporting

agency, the user of the consumer report shall . . . notify such consumer in

writing against whom such adverse action has been taken.”
MOHAMED V. UBER TECHNOLOGIES 27

In the same vein, there is no indication in the complaint

that Uber and Hirease share an identity of interest, which

Black’s Law Dictionary defines as “[a] relationship between

two parties who are so close that suing one serves as notice to

the other.” (10th ed. 2014). Because Hirease’s liability stems

from its own alleged violation of Massachusetts law,

independent of any actions Uber may or may not have taken,

there is no such relationship here.

Finally, the allegations Mohamed leveled against Hirease

were not “intimately founded in and intertwined with” the

underlying contract obligations established in the 2014

Agreement. Murphy, 724 F.3d at 1229 (quoting Kramer,

705 F.3d at 1128). The rule requiring enforcement of an

arbitration agreement under such circumstances “reflects the

policy that a plaintiff may not, ‘on the one hand, seek to hold

the non-signatory liable pursuant to duties imposed by the

agreement, which contains an arbitration provision, but, on

the other hand, deny arbitration’s applicability because the

defendant is a non-signatory.’” Id. (quoting Goldman v.

KPMG LLP, 92 Cal. Rptr. 3d 534, 543 (Cal. Ct. App. 2009)). 

Non-signatories can enforce arbitration agreements when they

are being sued “for ‘claims that are based on the same facts

and are inherently inseparable from arbitrable claims,’” id. at

1231 (quoting Metalclad Corp. v. Ventana Envtl. Org.

P’Ship, 1 Cal. Rptr. 3d 328, 334 (Cal. Ct. App. 2003)), but

[m]ere allegations of collusive behavior

between signatories and non[-]signatories to

a contract are not enough to compel

arbitration between parties who have not

agreed to arbitrate: those allegations of

collusive behavior must also establish that the

plaintiff’s claims against the nonsignatory are
28 MOHAMED V. UBER TECHNOLOGIES

intimatelyfounded in and intertwined with the

obligations imposed by the contract

containing the arbitration clause.Id. (quoting

Goldman, 92 Cal. Rptr. 3d at 545). Here, the

claims against Hirease arise under the MCRA

and not out of obligations imposed by the

2014 Agreement. Therefore, the rule that an

arbitration agreement can be enforced by a

non-signatorywhen the allegations against the

non-signatory are intimately founded in and

intertwined with underlying contract

obligations does not apply.

III. Conclusion

We affirm in part and reverse the district court’s order

denying Uber’s motions to compel arbitration and remand for

proceedings consistent with this opinion.

We affirm the district court’s order denying Hirease’s

joinder in the motion to compel.

All parties shall bear their own costs.

AFFIRMED in part, REVERSED in part, and

REMANDED.